Thursday, June 7, 2012

Diamond exports halve in April

The country's rough and polished
diamond exports for April dropped to P1.26 billion or less than half of
their value in March, latest Bank of Botswana figures indicate.

For
March, diamond exports were pegged at P2.95 billion, trending higher
from P2.2 billion in February. At P1.26 billion, April's exports are
seven percent lower than in April 2011, but healthily higher than the
year-to-date low of P805 million recorded in January 2012.
In US dollar terms, the April exports were pegged at US$173.8
million, with the Pula appreciating by 0.4 percent against the
greenback.While the BoB's data contains no trend analysis, analysis of
previous statements by leading diamond industry players sheds light on
the April drop in exports. Read together, the statements suggest the
April slump is part of the seasonal cycle of exports, rather than a
result of the slowly emerging pressure on commodity prices caused by
economic slowdowns in several European states. Late last year, Diamond
Trading Company (DTC) CEO, Varda Shine, told Mmegi Business that first
quarter diamond demand was driven by the Indian wedding season and the
Chinese New Year. Last year, China overtook Japan as the world's second
biggest market for diamonds after the United States.
Other experts have been positive on diamond prices and demand this
year, pointing to the continuing mismatch between demand for and supply
of high quality stones."The market for rough diamonds has continued to
improve following the correction to prices in September 2011," Gem
Diamonds said in a recent statement. "The Gem Diamonds Price Index has
shown increases in every sale since this correction and is up some seven
percent in 2012. "Gem Diamonds anticipates rough prices across the
market to continue increasing into the second quarter of 2012 and,
despite the relatively thin volumes being traded in the polished market
in high end goods, prices in these goods both in the polished wholesale
market and high end branded auctions are expected to improve further."
Earlier this year, De Beers Botswana CEO, Neo Moroka, told Mmegi
Business that the demand for diamonds has been strong at the sights or
auctions held by the Diamond Trading Company Botswana (DTCB) since the
beginning of the year. He said the sales were positive despite the fact
that cutting and polishing firms still had stockpiles of diamonds from
sights held last year.
"Due to the downturn at the end part of last year, companies have
been getting rid of the stockpiles and when the industry is selling off
stockpiles, the performance is not usually good," he said. "But much to
our surprise, our sights (rough diamond auctions) in the first quarter
of the year have been above expectations."The April drop, other analysts
believe, could be an indicator of higher inventory levels among diamond
manufacturers and retailers, as a consequence of the strong February
and March sales. Higher inventories and softer market demand generally
mean lower rough and polished diamond sales.